WASHINGTON (AP) — Treasury Secretary Henry Paulson told Congress on Wednesday that the federal government will hit the current debt ceiling on Oct. 1.
He urged quick action to increase the limit, saying it was essential to protect the "full faith and credit" of the country, especially at a time of financial market turmoil.
The current debt limit is $8.965 trillion. Unless Congress votes to raise that ceiling, the country would be unable to borrow more money to keep the government operating and to pay debt obligations coming due. The United States has never defaulted on a debt payment but the decision on whether to raise the debt ceiling often sparks a prolonged political battle in Congress.
The Senate Finance Committee earlier this month approved increasing the limit on the national debt to $9.82 trillion. That boost of $850 billion would be the fifth increase in the government's borrowing limit since President Bush took office in 2001.
Facing opposition in Congress, Bush held town hall-style public meetings across the U.S. in 2001 to increase public support for his plan for a $1.35 trillion tax cut program—one of the largest tax cuts in U.S. history. Bush and his economic advisers argued that unspent government funds should be returned to taxpayers. (that was when Clinton had actually established a balanced budget with perhaps a surplus – which never showed up under Bush)
By August 23, 2007, the national debt had officially risen to $8.98 trillion dollars; the national debt has increased $3.25 trillion dollars since Bush took office. The national debt stood at 5.73 trillion dollars when George took office. The budget was balanced at that time. It had increased from 4.35 trillion to 5.73 trillion in the 8 years of Clinton's reign. Prior to that, it had risen from 2.87 trillion to 4.35 trillion under Bush Sr. and from .996 trillion to 2.87 trillion under Reagan.
In other words, all the national debt incurred during the history of the United States prior to Ronald Reagan was more than quadrupled during Reagan/Bush 12 years of presidency. It increased by 31.72% under Clinton and now it is projected to increase by 83.25% under Bush. It is projected to reach 10.56 trillion dollars by the time George leaves office. Up until Reagan's presidency the country had survived major expansion and 2 world wars as well as numerous other conflicts including Korea and Vietnam and had amassed a total debt approaching 1 trillion dollars. Since then, with Republicans at the helm for 20 of the 28 years, our debt will have increased 10 fold – 10 times the amount we had incurred in the first 205 years. During those 28 years, the average citizen has seen his net spending power decrease, due to taxation and inflation. The wealth of the nation has shifted from the middle class to the wealthy.
We are becoming a country of haves and have-nots, similar to other third world countries. It has taken time and effort, but the speed is increasing. Where once the middle class family could survive on one person's income, it now takes 2 and with the increased cost of education and the limited availability of starter homes and starter jobs families will find it takes more to survive than ever before. Students and young adults will be staying with parents longer before striking out on their own. Soon, their income will become part of the family's requirements and more families will find multi-generations living together for economic reasons.
I don't see where the Democrats can be called the “tax and spend” party. It looks to be like the Republicans are the “take from the poor and the budget and give to the rich” party. If they handled my budget like they do the country's, I would be bankrupt. No wonder they want to strip the pension plans and do away with healthcare – it's taking money out of their pockets.
By the way, I want to raise my own personal debt limit a trillion dollars. Is that okay with me? Okay! Now I just need to find a sucker to lend me the money. Any takers?